Is a taxi company vicariously liable for an assault committed
by one of its drivers? In this decision, the Court of Appeal
considered this question.

Tanja Ivic alleged that she was sexually assaulted by a cab
driver who drove her home from a party. In addition to suing the
driver personally, she brought a claim against the taxi company,
pleading that it was vicariously liable for the acts of the driver,
that it was negligent, and that it breached its fiduciary duty to
her.

On a motion for summary judgment, the motion judge dismissed
Ivic's claim against the taxi company.

Ivic did not challenge the motion judge's conclusion that
her claim in negligence failed on the ground that she led no
evidence with respect to the applicable standard of care in the
circumstances nor regarding any breach on the part of the taxi
company. She also did not challenge the motion judge's
conclusion that she did not establish any basis for the existence
of a fiduciary duty. Her appeal turned on whether the taxi company
should be held liable for the assault, in the absence of any fault
on its part.

The Court of Appeal agreed with the motion judge that the taxi
company was not vicariously liable.

Hoy A.C.J.O. emphasized that in order for there to be a
finding of vicarious liability, there must be a strong connection
between what the employer was asking the employee to do and the
wrongful act. She concluded that there was no such connection in
this case.

The Supreme Court of Canada outlined the test for assessing
vicarious liability in Bazley v. Curry, [1999] 2 S.C.R.
534. When considering whether an employer is liable for
unauthorized, intentional wrongdoing on the part of one of its
employees, courts must consider:

(i) the opportunity that the
enterprise afforded the employee to abuse his or her power;

(ii) the extent to which the
wrongful act may have furthered the employer's
objectives;

(iii) the extent to which the
wrongful act was related to friction, confrontation or intimacy
inherent in the employer's enterprise;

(iv) the extent of power conferred
on the employee in relation to the victim; and

(v) the vulnerability of potential
victims to wrongful exercise of the employee's power.

While acknowledging that the opportunity for a taxi driver to
assault a passenger was not negligible, Hoy A.C.J.O. found that the
driver's opportunity for misconduct was not intimately
connected to his functions. She distinguished the circumstances of
this case from those in Bazley, where a non-profit
organization that operated residential care facilities for the
treatment of emotionally troubled children was held vicariously
liable for an employee's sexual abuse. In Hoy A.C.J.O.'s
view, the taxi driver's opportunity for misconduct did not rise
to the level of what existed in Bazley.

Hoy A.C.J.O. disposed of the second, third and fourth
factors noting that the alleged assault did not further the taxi
company's aims in any respect and was not related to friction,
confrontation or intimacy inherent in the employer's aims.
Unlike the employee in Bazley, taxi drivers do not have
physical contact with their customers in the course of carrying out
their duties. In fact, the taxi company's Rules and Regulations
sought to prevent such contact, explicitly providing: "Do not
touch any customer if possible". Hoy A.C.J.O. noted that in
dispatching the driver to pick up the appellant, the taxi company
did not confer any power on him. "What power the driver had,
he arrogated to himself through his own decisions", the court
held.

Turning to the issue of the vulnerability of
potential victims to the wrongful exercise of the employee's
power, Hoy A.C.J.O. acknowledged that a lone, intoxicated woman out
late at night is vulnerable. However, she is "prey" not
only to taxi drivers. Any power wrongfully exercised by this driver
was not predicated on his employment. Hoy A.C.J.O. agreed with the
motion judge that the requisite strong connection between what the
taxi company was asking the driver to do and the alleged sexual
assault was not present. The company did not materially increase
the risk of the appellant being sexually assaulted by permitting
the driver to drive the taxi and dispatching him. The alleged
assault was only "coincidentally linked" to its
activities.

Hoy A.C.J.O. also noted that the appellant failed to
demonstrate that the imposition of vicarious liability in this case
would further the broader policy rationales of fair
compensation and deterrence.

In this decision, the Court of Appeal considered
whether solicitors who allegedly violated the Solicitors
Act, R.S.O. 1990, c. S. 15 are immune from a class proceeding
brought on behalf of their former and current clients.

The respondent Cassie Hodge was injured in a motor
vehicle accident in 2002. She retained the appellants, Gary
Neinstein and Neinstein & Associates LLP, and signed a
contingency fee arrangement with the firm. The agreement provided
that the firm's legal fees would be equal to twenty-five per
cent of the damages recovered on her behalf, plus partial indemnity
costs and disbursements.

Hodge entered into a settlement and the firm rendered
a final account.

It was undisputed that the contingency fee agreement
and the amount the appellants charged were in violation of the
Solicitors Act in two respects. First, contrary to s.
28.1(8), the firm did not obtain approval to include in its fee the
costs obtained as part of Hodge's settlement. Second, in
violation of s. 33(1), the firm charged interest from the date
disbursements were incurred and not from a date one month after its
bill was delivered.

Hodge brought a motion to certify a class proceeding
against the firm on behalf of all its contingency fee clients since
October 2004. In her Amended Notice of Application, she sought a
declaration that the firm was in violation of the Solicitors
Act and breached its fiduciary duties to and contracts with
the class members. She also sought an order that the firm repay any
amounts taken for costs in addition to a percentage of damages. In
all, 37 common issues were sought to be certified.

The certification judge found that Hodge failed to
satisfy the five-part test for certification under s. 5(1) of the
Class Proceedings Act, 1992, S.O. 1992, c. 6.
Specifically, the proposed class proceeding did not satisfy the
"common issues" requirement in s. 5(1)(c) or the
"preferable procedure" requirement in s. 5(1)(d).

The Divisional Court allowed Hodge's appeal and
certified the matter as a class proceeding. It certified 19 common
issues, including those based on the alleged breach of ss. 28.1(8)
and 33(1) of the Solicitors Act. The court denied
Hodge's motion to amend her Amended Notice of Application to
plead the tort of conversion, however, concluding that it added
nothing of substance to the proceeding as currently
drafted.

The appellants argued before the Court of Appeal that
the matter should not have been certified as it failed to disclose
a cause of action, fundamentally lacked in commonality and failed
the preferable procedure requirement. They also submitted that ss.
23-25 of the Solicitors Act preclude the possibility of a
class proceeding against the firm because those provisions form a
"complete code" and require individual assessments of
client accounts. The appellants asserted that in any event,
solicitor-client privilege shielded them from the class proceeding.
Hodge cross-appealed, arguing that the Divisional Court erred by
denying her leave to amend her Amended Notice of Application to
plead the tort of conversion and failing to certify further common
issues.

The Court of Appeal dismissed the appeal.

Writing for the Court, Hoy A.C.J.O. held that it was
not plain and obvious that a cause of action relying on s. 28.1 had
no reasonable prospect of success. She also held that it was not
plain and obvious that an application under ss. 23-25 was not
available to review the impugned contingency fee agreements.
Finally, she found that Hodge's pleadings disclosed a cause of
action for breach of fiduciary duty and breach of contract.

Citing the decision of the Supreme Court in
Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC
46, Hoy A.C.J.O. noted that the underlying commonality question was
whether allowing a proceeding to continue as a class proceeding
would avoid duplication of fact-finding or legal analysis. She
ultimately found no basis to interfere with 18 of the 19 common
issues found by the lower court, taking issue only with the third
common issue of whether the firm actually took amounts arising from
costs in an award or settlement in contravention of the
Solicitors Act. This, she held, should be characterized as
an individual issue.

Hoy A.C.J.O. held that the Divisional Court was
correct in certifying the class proceeding on the basis that it was
the preferable procedure for the resolution of these disputes,
noting the three principal goals of judicial economy, behaviour
modification and access to justice. She also agreed that the issue
of solicitor-client privilege should not be a bar to certification
because the court retains power under s. 10(1) of the Class
Proceedings Act to decertify the class proceeding if it
appears that the certification criteria are no longer
satisfied.

Turning to the cross-appeal, Hoy A.C.J.O. rejected
Hodge's submission that the Divisional Court erred by denying
leave to amend her Amended Notice of Application to plead the tort
of conversion. She agreed with Hodge, however, that the Divisional
Court erred in failing to certify further common issues, holding
that the court ought to have certified the issues of (i) whether
the conduct of the firm – in allegedly failing to disclose
information required by the Solicitors Act and the
Regulation in its contingency fee agreements and taking as part of
the fees amounts arising from awards or settlements for costs
– breached fiduciary duties to class members, and (ii)
whether there was entitlement to punitive damages.

In this decision, the Court of Appeal revisited the
role of the trial judge as "gatekeeper" to the admission
of expert opinion evidence.

The appellant, Liese Bruff-McArthur, was hit from
behind by the respondent while stopped in her car. She alleged that
she suffered multiple physical and mental injuries as a result of
the accident, which left her unable to work and with a
substantially diminished quality of life. Bruff-McArthur commenced
an action against the respondent, who admitted liability. There was
a 23 day jury trial on damages.

The appellant called a number of physicians who had
either treated or examined her, two of whom were retained by the
respondent's insurer to conduct assessments. These witnesses
agreed that she suffered in the manner claimed and that the cause
of her suffering was the motor vehicle accident.

In support of its case, the defence called two
medical expert witnesses which it had retained to conduct defence
medical assessments. One of these witnesses, psychiatrist Dr. Monte
Bail, raised a number of concerns. Counsel for the appellant
objected to Dr. Bail's testimony, arguing that he was biased
against her client and that his report was essentially an attack on
Bruff-McArthur's credibility.

The trial judge did not express any concerns with
respect to Dr. Bail's testimony or his independence at the
time, nor did he instruct the jury regarding the duty of expert
witnesses.

The jury returned with a verdict assessing general
damages at $23,500 and rejecting all other heads of damages,
including special damages, future care costs and past and future
income loss.

Shortly thereafter, the trial judge released his
decision on a threshold motion in which defence counsel had argued
that Bruff-McArthur failed to meet the requirements in s. 267.4(12)
of the Insurance Act, R.S.O. 1990, c. I. 8, i.e., of
suffering a permanent serious impairment of an important physical,
mental or psychological function. In his reasons – in which
he concluded that the appellant's claim for general damages did
meet the threshold – the trial judge was highly critical of
Dr. Bail's evidence, expressing concerns about the expert's
methodology and independence. He found that Dr. Bail was not a
credible witness and did not honour his obligation and written
undertaking to be fair, objective and non-partisan pursuant to Rule
4.1.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg.
194. Rather, he crossed the line from an objective witness to an
advocate for the defence.

The appellant took the position that trial fairness
had been compromised, necessitating a new trial.

The Court of Appeal agreed.

Writing for the court, Hourigan J.A. noted the
evolution of the role of expert witnesses from a "hired
gun" or advocate for the party that retained him or her to an
independent source of fair and objective opinion to assist the
trier of fact. The role of the trial judge in relation to expert
witnesses has evolved in tandem: as the "gatekeepers" to
the admission of expert opinion evidence, trial judges are required
to carefully scrutinize an expert witness's training and
professional experience, and the necessity of his or her testimony,
before the expert is qualified to give evidence in court. Hourigan
J.A. emphasized that the gatekeeper function is especially
important in jury cases as the jury may inappropriately defer to
the expert's opinion rather than evaluate the expert evidence
on their own.

Hourigan J.A. found that the trial judge failed to
properly discharge the gatekeeper function at the qualification
stage and held that had he done so, he would have concluded that
the risks of permitting the expert to testify far outweighed any
potential benefit from the proposed testimony. In Hourigan
J.A.'s view, the concerns identified by the trial judge in his
decision on the threshold motion were substantially correct: Dr.
Bail "crossed the boundary of acceptable conduct and descended
into the fray as a partisan advocate". In fulfilling his
ongoing gatekeeper function, the trial judge ought to have excluded
Dr. Bail's testimony, in whole or in part. He failed to do so,
and trial fairness was "irreparably compromised".

In 2012, Parliament enacted the Justice for
Victims of Terrorism Act, S.C. 2012, c. 1 (JVTA),
which was designed to "deter terrorism by establishing a cause
of action that allows victims of terrorism to sue perpetrators of
terrorism and their supporters". The statute provides for a
direct cause of action and an ability to sue on a foreign judgment
obtained for loss or damage suffered as a result of terrorist
activities.

The respondents held judgments issued by courts in
the United States for the sponsorship of terrorism by one or more
of the appellants, the Islamic Republic of Iran, the Iranian
Ministry of Information and Security, and the Islamic Revolutionary
Guard Corps, a military wing of that ministry. They sued in Ontario
to enforce their judgments under the provisions of the
JVTA.

The appellants did not defend the respondents'
enforcement actions, and ultimately a series of judgments and
enforcement orders were granted. The appellants then moved
unsuccessfully to set aside the judgments and orders in a series of
motions before the motion judge.

The Court of Appeal dismissed the appellants'
appeals, holding that if their submissions were accepted, they
would have the effect of rendering enforcement actions under the
JVTA "a cumbersome and largely unworkable
process" that would provide limited recourse to victims of
terrorism.

Writing for the court, Hourigan J.A. held that the
appellants' immunity from the jurisdiction of the Canadian
courts was removed by the JVTA and s. 6.1 of the State
Immunity Act, R.S.C. 1985, c. S-18 (SIA) with respect
to its sponsorship of terrorist acts that occurred on or after
January 1, 1985, but not before. Hourigan J.A. rejected the
appellants' submission that the JVTA could not apply
retroactively, noting that Parliament has the power to make
legislation retroactive as well as the authority to ignore
international law through the use of clear statutory language.
Hourigan J.A. also rejected the submission that the appellants were
immune because the respondents failed to prove that the appellants
were supporters of terrorism, explaining that the only proof
necessary to maintain an enforcement action under s. 4(5) of the
JVTA is the listing of the state sought to be sued under
s. 6.1(1) of the SIA. In Hourigan J.A.'s view, the
trial judge properly relied upon the facts found in the U.S.
judgments and the respondents were not required to prove the
commission of a specific offence beyond a reasonable doubt.

Hourigan J.A. held that the motion judge applied the
correct test for setting aside a default judgment and that the
appellants did not meet their onus in establishing that even a
single factor militated in favour of setting aside the judgments in
question.

The Court of Appeal therefore dismissed the appeals,
except for judgments based on acts of terrorism that occurred prior
to January 1, 1985.

These appeals arose in the context of class actions
commenced in 2008 and certified in 2012. The appellant charitable
organizations sought remedies for what they characterized as
unconstitutional or illegal taxation by the respondent
municipalities, relating to bingo licence and administration fees
charged by the municipalities.

The appeals were from four orders of the case
management judge, Patterson J., two in each proceeding.

On January 13, 2017, Patterson J. made orders
granting a motion to lift orders in the two proceedings dated June
9, 2016, protecting from disclosure the identities of persons who
opted out of the class. The respondents moved to quash the appeals
on the basis that the orders lifting the protective orders were
interlocutory and that the route of appeal was to the Divisional
Court with leave, pursuant to section 19(1)(b) of the Courts of
Justice Act, R.S.O. 1990, c. C.43.

The Court of Appeal granted the motion to quash the
appeals from these orders.

Writing for the court, van Rensburg J.A. agreed with
the respondents that the protective orders were interlocutory. The
orders were res judicata on the question of whether the
identities and other information concerning opt-outs could be
revealed; however, they did not determine on any final basis any
substantive issue or right that could be determinative of the
action. Justice van Rensburg rejected the appellants'
submission that the orders were final because they may affect the
rights of those who had opted out of the class, noting that as
between the parties to the litigation, they were interlocutory
orders that did not determine any rights or issues in the
proceeding on a final basis. As the case management judge observed,
the protective orders were designed to safeguard the integrity of
the reconsideration period and should not outlast it. A decision to
lift a protective order that was in place for a period that has
expired is effectively a decision not to continue a protective
order. Such an order is interlocutory.

On November 1, 2016, Patterson J. refused leave to
the appellants to amend their Amended Statements of Claim. The
amendments, which the appellants proposed after the opting out
period had expired, sought an accounting of licence and
administration fees received by the municipalities found to be
levied without authority or ultra vires, and disgorgement
of such fees, with an alternative claim of restitution of fees
charged to the plaintiffs and other class members in accordance
with the accounting. The effect of the proposed amendments, if
allowed, would have been to allow for the right to claim a recovery
for the class of fees received by the respondents from persons no
longer in the class.

The Court of Appeal dismissed the appeals from
Patterson J.'s orders.

Justice van Rensburg held that the proposed
amendments were not simply the clarification of a cause of action
already pleaded, nor did they advance a different remedy for the
same alleged cause of action. Rather, they sought to recast the
claim from one for the return of fees paid by class members to a
claim for disgorgement of all illegal licence and administration
fees paid to the respondent municipalities within the class period,
including those not paid by members of the class. In van Rensburg
J.A.'s view, the acknowledgment that the claim, as originally
pleaded, disclosed a cause of action did not assist the appellants
in respect of amendments that sought to reconfigure the
claims.

Justice van Rensburg rejected the appellants'
reliance on Kingstreet Investments Ltd. v. New Brunswick
(Finance), 2007 SCC 1, noting that while that case recognized
that a claim can be made for repayment of illegal taxes as a public
law remedy, it was not authority for a claim for the
"disgorgement" of all allegedly illegal fees obtained by
the respondents during the class period, including those paid by
persons other than class members. Moreover, characterizing the
remedy as a "disgorgement" did not assist the appellants.
Disgorgement permits a plaintiff to claim not only its own loss but
also the profit or gain of the defendant as a result of the wrong;
it is not a vehicle for a plaintiff to pursue a claim for relief
owed to someone who is a "stranger" to the action.
Justice van Rensburg found that there was no reasonable prospect
that the appellants' proposed claim for repayment of allegedly
illegal taxes paid by persons other than class members would
succeed.

The Court of Appeal did not agree with the case
management judge's suggestion that the Supreme Court of
Canada's decision in Alberta v. Elder Advocates of Alberta
Society, 2011 SCC 24, narrowed the Kingstreet
constitutional/public law remedy to cases where the statute was
subsequently declared unconstitutional.

Justice van Rensburg also held that there was no need
for the proposed amendments to claim aggregate damages, noting that
the appellants would be able to advance such a claim in the
proceedings whether or not it was asserted in the
pleadings.

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